Sco Plans Shift Away From Us Dollar, Embraces National Currencies For Transactions

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The Shanghai Cooperation Organisation (SCO), a China-led regional organization, plans to settle transactions in the national currencies of its member nations. This initiative is intended to wean the world off the US dollar, which has long been the dominating currency in international trade.

The bloc's Deputy Secretary General, Grigory Logvinov, claimed in an interview with Belarus 1 state TV station that "a roadmap for the transition to settlements in national currencies is being developed." He went on to say that the efforts in that regard are "serious and substantive," but that there is still a long way to go before the dollar is totally replaced.

The SCO was established in Shanghai in 2001 as a political, economic, and defense alliance. It covers approximately 60% of Eurasia and 40% of the world's population. Currently, China, Russia, India, Pakistan, Tajikistan, Kazakhstan, Uzbekistan, and Kyrgyzstan hold full membership, while Iran, Saudi Arabia, and Turkey are observers and partners.

Despite the planned cancellation of dollar settlements, SCO members are not yet considering ...
... a single currency. Logvinov noted that "such a goal has not yet been set." However, reports have revealed that the BRICS group of leading emerging economies, which includes China, Russia, and India, is working on a new currency for international payments. In August, BRICS leaders will discuss the development of this new currency.

BRICS currencies threaten the dominance of the dollar, alarming the U.S. However, only time will tell whether the new currency will gain traction and compete with the dollar in the international settlements market.